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Finance & Taxation        < Previous        Next >


A New Focus on Cost-Effectiveness


Q. I get the feeling that schools are often throwing money at problems. I don't see them taking a businesslike approach to figuring out what has worked elsewhere, or is most likely to work, and at the least possible cost and fuss. How strict are school leaders about insisting on data-driven cost-effectiveness in making decisions about how to spend money?


You're speaking the language of the Center on Reinventing Public Education in Washington State. Researchers there have been funded by the Bill & Melinda Gates Foundation to examine school finance and make recommendations for new ways of handling money in schools that would follow an investment model more closely. The goal: to close the decades-old achievement gaps between students along racial and income lines.


The center has used five years and more than 30 sponsored studies to confirm that there are nowhere near enough plausible connections between problems and solutions from a cost-effectiveness standpoint in school financial decision-making. Researchers there contend that, actually, no one can say how much money would be enough to solve any given problem, even if it were shown to be the optimal solution, because of the lack of a cause-effect basis in school finance. That's what the center hopes to foster with its recommendations, due out in summer 2008.


According to scholars Paul T. Hill and Marguerite Roza of the center, districts that get more money tend to use it to increase the pay of the employees they already have, to keep doing what they're already doing, only more so. Naturally, they fail. They may spend more money, but they still fail. The researchers said that effective innovations were "rare and isolated" because of the hesitance to embrace real change.


One of the main reasons for that is that accounting systems in schools are antiquated and inefficient. They work to hide the costs of programs and the fiscal impact of various aspects of the union contracts. It is nigh on impossible to find out how much money is spent on a particular student or a particular school. So no wonder educators can't connect costs to results - they simply don't have the data to do so.


And that just makes it nigh on impossible to adopt alternatives or get sufficient backing for experiments. The researchers say those teachers and principals who are bold enough to innovate often are afraid to get in trouble for "noncompliance," so they hide what they're doing. Consequently, others don't find out about their innovations that are actually better than the status quo. Good, cheap ideas are kept under the radar. So, on a large scale, innovation is quashed. Districts are left doing the same old, same old, even though everybody knows it isn't working. But when you're groping in the dark, you grasp what's familiar. What schools need is better data.


The center's scholars are calling for schools to:


         Be more transparent about how funds are used down to the per-student level


         Get teachers and principals more involved in the financial decision-making


         Encourage school officials to be more insistent about being presented with options that might be more cost-effective than the status quo


         Utilize analysis that links student characteristics to teacher attributes to the type of instruction given, student results, and costs


Homework: The study, the School Finance Redesign Project, was due out in summer 2008 from the Center on Reinventing Public Education, University of Washington.


By Susan Darst Williams Finance & Taxation 04 2008


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